Tag Archives: Indiana

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale. The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it. …

President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition — but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan. As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor. …

Since we’ve written frequently about the contentious issue of toll roads, we can’t let pass without notice Monday’s news that the company operating the Indiana Toll Road has filed for bankruptcy. In 2006, under Republican Gov. Mitch Daniels, the state entered into a 75-year lease with a partnership formed by the Spanish firm Cintra and the Australian Macquarie Infrastructure Group. The state got a lump-sum payment of $3.8 billion. The partnership formed a company, which now operates the toll road that stretches across the northern part of the state. According to a Congressional Research Service report, after 2010, toll increases were limited to the greater of 2 percent, the percentage change in the Consumer Price Index, or the percentage increase in per capita nominal Gross Domestic Product. Caitlin Devitt who has a good account of the fallout from the bankruptcy filing in The Bond Buyer, quotes Standard & Poor’s analyst Anne Selting who said toll roads are among the riskier public-private partnerships because “they’re obviously completely dependent on volume and user projections.”

Neglected water infrastructure is a national plague. By one estimate, U.S. water systems need to invest $1 trillion over the next 20 years. Meanwhile, federal funding for water infrastructure has fallen 74 percent in real terms since 1977, and low-interest government loans have not filled the gap. … The prospect of offloading these headaches to for-profit water companies — and fattening city budgets in the process — is enticing to elected officials who worry that rate hikes could cost them their jobs. Once a system has been sold, private operators, not public officials, take the blame for higher rates. But privatization will not magically relieve Americans of the financial burden of upgrading their water infrastructure. … One of the biggest inducements for water deals is the “fair market value” legislation that has been passed in six states — Indiana, California, Illinois, Missouri, New Jersey and Pennsylvania — and is being considered by others. …

… Even as more cities consider selling their water infrastructure, others are trying to wrest control of their systems back from private operators, usually because of complaints about poor service or rate hikes. Since private owners are rarely willing to surrender these lucrative investments, cities usually end up pursuing eminent domain in court. That means proving that city ownership is in the public’s interest and then paying a price determined by the court. Those prices can be exorbitant. …

The U.S. Department of Justice continues to build its case against East Texas Medical Center and its ambulance division, Paramedics Plus, in what they say is a $20 million kickback scheme to ensure Paramedics Plus retained lucrative contracts. Most recently, Justice Department attorneys filed a list of people they expect to depose in coming months. In all, more than 100 people could be deposed as this case moves forward. The government also filed a proposed schedule, which outlines when fact discovery will take place, when expert discovery will occur, deadlines for motions and trial preparation and finally, an expected timeframe for the start of the trial – summer of 2018. … In January, the Justice Department announced it would intervene in a lawsuit against ETMC and Paramedics Plus brought by a whistleblower – former employee Stephen Dean, who was Paramedics Plus chief operating officer. According to the suit, ETMC and Paramedics Plus paid more than $20 million in kickbacks and bribes, including cash payments to Oklahoma officials. …

Former U.S Attorney Brian Albritton told Pinellas County Commissioners Tuesday that a federal lawsuit alleging ambulance fee kickbacks could have cost taxpayers as much as $1 billion if they lost in court. Commissioners agreed to settle the case involving Paramedics Plus Sunstar ambulance service for $92,700 and to forgo an estimated $500,000 in uncollected ambulance fees from patients. They will also have to pay legal fees to Albritton who the county secretly hired last year to resolve the case. Pinellas commissioners discussed the case publicly Tuesday for the first time since Eight On Your Side first broke the story of alleged kickbacks and a federal investigation of Pinellas County’s ambulance contract last month. That settlement, signed March 7 by Vice-Chair Kenneth Welch, requires the county to pay $92,700 to federal prosecutors, the Florida Attorney General and attorneys for the whistleblower–a former executive with Paramedics Plus. It also requires Pinellas County to turn over all documents and evidence gathered in the course of the county’s own internal investigation, and to cooperate with an ongoing federal investigation and whistleblower action filed against Paramedics Plus in Texas.

… Since 2004, Paramedics Plus has operated as Pinellas County’s exclusive ambulance provider under the county-owned brand name Sunstar. The current county contract with Paramedics Plus amounts to about $50 million a year. In 2014, a former high-ranking executive of Paramedics Plus filed a whistleblower action in Texas that alleged an ongoing ambulance fee kickback scheme that stretched from Pinellas County to Oklahoma and California for over a decade. The scheme alleged by the whistleblower and federal prosecutors in a related legal action included so-called “profit cap” rebates that essentially funneled overcharges from Medicaid and Medicare to Pinellas County and other local governments that oversee public ambulance contracts. County leaders in Pinellas insist the “rebates” or “kickbacks’ in Pinellas totaled only $35,000 or so and ended up in county bank accounts, not someone’s pockets. In Oklahoma, the whistleblower suit alleges those kickbacks amounted to as much as $20 million. Federal prosecutors in Texas have cited specific acts of corruption in Oklahoma that include kickbacks, political payoffs and self-enrichment involving Paramedics Plus executives and government overseers in Oklahoma. … Pinellas County Administrator Mark Woodard says the settlement has no impact on the county’s ongoing $50 million a year contract with Paramedics Plus because the company has not been charged criminally or been found guilty of anything.

A Texas health system paid an Oklahoma agency and its president $20 million in cash bribes in exchange for lucrative ambulance service contracts over 15 years, federal prosecutors said ( United States ex rel. Dean v. Paramedics Plus, LLC , E.D. Tex., No. 14-cv-203, complaint in intervention 1/23/17 ). The U.S. Attorney’s Office for the Eastern District of Texas partially intervened Jan. 23 in a whistle-blower lawsuit, filed under court seal in 2014, accusing East Texas Medical Center Regional Healthcare System (ETMC) of paying the kickbacks to Oklahoma’s Emergency Medical Services Authority (EMSA). Specifically, the government said ETMC concocted the kickback scheme with EMSA president and co-defendant Herbert S. Williamson, and paid the kickbacks through checks, bank wires and inflated service contracts, mostly through ETMC’s ambulance service company, Paramedics Plus LLC. The government said it paid the defendants over $70 million in Medicare reimbursements and over $38 million in Medicaid reimbursements just from 2009 through 2013, and it was seeking treble damages on all payments tainted by the kickback scheme, plus monetary penalties for each individual false claim submitted. The FCA authorizes monetary fines of up to $11,000 for each false claim submission. The U.S. Attorney’s Office declined to comment on whether criminal charges against Williamson would be coming in the future. … The complaint describes how Paramedics Plus, which contracted with the EMSA to provide ambulance services within the EMSA’s jurisdiction, was forced to “cut corners” due to the amount of its revenue that went to paying kickbacks. Paramedics Plus “avoided training and personnel expenses” to make sure enough money was available to pay kickbacks to the EMSA and Williamson, according to prosecutors. The complaint alleges Paramedics Plus executives were forced to forgo paying drivers and paramedics retention bonuses to stem high paramedic turnover because the company “would not have enough excess profits to make [Williamson] whole.”

The Indiana Department of Corrections has discontinued its contract with Corizon Health, the private corporation that handles most of the state’s inmate healthcare. Corizon announced last week that it would be laying off about 700 employees in 22 locations around the state. The contract, which is worth $100 million a year, is being taken up by Pittsburg-based Wexford Health Sources. A representative from Corizon said in a letter to the state that Wexford may end up hiring many of Corizon’s former employees, though there’s no guarantee that will happen. The loss of the corrections contract is the most recent in a string of contract losses for Corizon. … An investigation by the South Bend Tribune last year revealed hundreds of inmate complaints and dozens of lawsuits against Corizon in Indiana. One severely disabled patient died after just 37 days in a state prison under the care of Corizon employees. Another died in an ambulance during a two-hour drive to a hospital, despite a much closer hospital being available. Wexford Health Sources’ record isn’t spotless, either. Wexford paid out $3.1 million to settle five years of complaints in Illinois, including delayed treatment and low-quality care.

Nicholas Glisson died on October 10, 2010 in Indiana State Prison. … Glisson had complicated medical needs as a result of laryngeal cancer, and was under the care of Corizon Health, a private company providing medical care to prisoners in Indiana’s Department of Corrections. His mother, Alma Glisson, says he knew how to take care of himself. Alma blames Corizon for his death. What happened to Nicholas Glisson and what it means for private prison contractors if a jury rules in his favor is the subject of this week’s Case In Point story from The Marshall Project.

Some of the country’s biggest players in the increasingly privatized business of providing medical care to inmates have expressed interest in Indiana’s expiring contract with Corizon Health. Corizon, widely cited as the largest, has faced an onslaught of negative publicity in recent years, with a growing number of lawsuits and contracts ended in other states. Corizon and its role with Indiana’s Department of Correction was the subject of a Tribune series in June called “Profits over Prisoners?” Corizon’s three-year contract, worth nearly $300 million expires at the end of the year. Bids are due Nov. 9. Several competitors attended a conference last month for possible bidders. Among them were:
• Wexford Health, based in Pittsburgh and close on Corizon’s heels in the number of contracts it holds, has itself been the subject of controversy in delivering medical care in prisons, including in neighboring state Illinois.
• Centurion, based in Vienna, Va., whose contracts include facilities in Florida, Minnesota, Vermont, Mississippi and Tennessee.
• Correct Care Solutions, based in Tennessee as is Corizon, says on its website it operates in 38 states and in Australia. It also provides health care to Indiana inmates in some county jails, such as in Elkhart, Porter and Marion counties. …

The Indiana Department of Education and the attorney general’s office both had been warned. Teachers at the tiny Todd Academy weren’t getting paid. Parents complained that classes were being held in an unsafe building without heat, and the school appeared to be promoting children who weren’t ready, in an effort to secure more state money. Yet after two visits by the education department and an investigation by the attorney general’s office, the troubled Indianapolis private school still received thousands of dollars in public funds through Indiana’s school voucher program and remained eligible to receive state voucher money until it collapsed under the weight of its unpaid debts. … An IndyStar examination of Todd Academy’s experience with school vouchers exposes a serious lack of basic fiscal controls in Indiana’s highly popular school choice system. While both traditional public schools and charter schools must open their budgets to public scrutiny, voucher schools are exempt from any financial vetting — to the point that even when mismanagement has been repeatedly alleged, state officials are loath to intervene. … Despite hints of money trouble from the start, state officials approved Todd Academy to receive about $200,000 in voucher funds over three years. The school was free to keep taking public dollars, even though it had stopped filing its nonprofit tax reports. It was sued 13 times with judgments against the school in all but one case, totaling $1.8 million. … It has been six years since the state launched what has become one of the largest and broadest voucher programs, now serving more than 34,000 children at a cost of $146 million a year.

… Bolstered by the addition of vouchers, Todd Academy started to rack up hefty financial obligations the next year with the hopes of expanding to more than 50 students. … Todd Academy also had been shorting teachers’ paychecks, according to lawsuits by a dozen teachers, nine of whom eventually won judgments against the school. … The school’s finances had deteriorated to the point where Todd Academy used the promise of state voucher money to secure high-interest loans, only to be found in default of the contracts. … State law is careful to protect the autonomy of private schools participating in the voucher program. It preserves their independent curriculum, whether it be religious or not. They’re not an agent of the state, and only a portion of their revenues come from the state. The state requires financial transparency from public schools, which risk losing state funding if they’re not accountable. Schools can have their charter revoked or control taken away by the state. But voucher schools have been shielded in state law from providing any financial transparency. …

Betsy DeVos, the new U.S. secretary of education, is a strong proponent of allowing public education dollars to go to private schools through vouchers, which enable parents to use public school money to enroll their children in private schools, including religious ones. … This report seeks to inform that debate by summarizing the evidence base on vouchers. Studies of voucher programs in several U.S. cities, the states of Florida, Indiana, Louisiana, and in Chile and India, find limited improvements at best in student achievement and school district performance from even large-scale programs. In the few cases in which test scores increased, other factors, namely increased public accountability, not private school competition, seem to be more likely drivers. And high rates of attrition from private schools among voucher users in several studies raises concerns. The second largest and longest-standing U.S. voucher program, in Milwaukee, offers no solid evidence of student gains in either private or public schools. In the only area in which there is evidence of small improvements in voucher schools—in high school graduation and college enrollment rates—there are no data to show whether the gains are the result of schools shedding lower-performing students or engaging in positive practices. Also, high school graduation rates have risen sharply in public schools across the board in the last 10 years, with those increases much larger than the small effect estimated on graduation rates from attending a voucher school.

… The lack of evidence that vouchers significantly improve student achievement (test scores), coupled with the evidence of a modest, at best, impact on educational attainment (graduation rates), suggests that an ideological preference for education markets over equity and public accountability is what is driving the push to expand voucher programs. Ideology is not a compelling enough reason to switch to vouchers, given the risks. These risks include increased school segregation; the loss of a common, secular educational experience; and the possibility that the flow of inexperienced young teachers filling the lower-paying jobs in private schools will dry up once the security and benefits offered to more experienced teachers in public schools disappear. The report suggests that giving every parent and student a great “choice” of educational offerings is better accomplished by supporting and strengthening neighborhood public schools with a menu of proven policies, from early childhood education to after-school and summer programs to improved teacher pre-service training to improved student health and nutrition programs. …

The Nov. 4 incident, which took hold of 600 county computers and 75 servers, forced a local jail to revert to pen and paper and had police officers calling other agencies for criminal record look-ups. The county paid a $21,000 ransom following the advice of its insurance carrier, Travelers Insurance, and commissioners subsequently approved three U.S. Signal contracts for defense and offsite storage totaling almost $200,000. The trojan that infected county networks – CryptoLocker – is one of the most common variants of ransomware found in the wild. When the malware infects a computer system it will encrypt data and create a personal key that is stored by the attackers. Victims will be asked to pay a ransom to unlock their files. … Cannon, who had been IT director just two months when the incident hit, traced the incident to three factors:

Four years prior, the county’s IT budget had been cut from almost $1 million to about $400,000, reducing the department from 11 staff members to six.

The county had no offsite backup.

The ransomware made its way onto county networks via a vulnerability left behind by a vendor that the county should have monitored more closely.

An ongoing legal investigation prevented Cannon from revealing who the vendor was, or exactly what or where the vulnerability was. The bottom line, she said, is that the county is now watching its vendors more closely. …

… The problem began four years ago, when the county council slashed the IT budget, Cannon said. There was “so much going on with politics at that time,” she said, and implementation of the tighter budget was hasty and uncoordinated. A vote on a Tuesday determined the fate of five county workers on that Thursday. …

The more than 170 people who showed up at Woodland Park Tuesday were clearly frustrated with the entire process that has precipitated the ability for liquor to be served at the Indiana Dunes State Park pavilion. … But while the purpose of the gathering was a hearing by the state’s Natural Resources Commission to put a state rule in compliance with a new state law about liquor at the park, the meeting grew contentious when the hearing officers told the crowd that the new law would override the rule regardless of whether it was changed. … A new state statute that took effect in July allowed the Indiana Department of Natural Resources to apply for a three-way liquor license for the state park pavilion. The license was granted in August and is being held in escrow by the DNR until the work to renovate the pavilion, including a fine dinging restaurant and rooftop bar, is complete by Pavilion Partners, which is led by Valparaiso businessman Chuck Williams. In a public/private partnership with the DNR, those plans also include an adjacent, 17,000-square-foot banquet center. Both the plans for serving liquor at the pavilion and the banquet center have generated a wide swath of opposition from the grassroots group Dunes Action and others since the plans became public more than a year and a half ago.

An Indiana House committee approved a bill that could put an embattled privatization deal back on track by allowing a politically connected developer to sell alcohol at proposed restaurants and a bar at Indiana Dunes State Park. The House Public Policy Committee voted 12-0 Wednesday in favor of a bill by Rep. Sean Eberhart, a Shelbyville Republican. The measure would allow the Department of Natural Resources to obtain liquor permits for state parks.

Let’s hope that 2016 brings an end to the privatization of our Indiana Dunes State Park beach. The Indiana Department of Natural Resources has signed a lease to allow the construction of a banquet center on the beach at the Indiana Dunes State Park. If allowed, how could they say no to any other commercial venture in this or any park? … State parks are part of the public trust. We enable our state government to protect special places for their unique landscapes, cultural history, plants and animals, etc. They protect them for us. Pause Current Time 0:00 / Duration Time 0:00 Loaded: 0%Progress: 0%0:00 Fullscreen 00:00 Unmute As part of this trust, it requires public funding or that whole philosophy goes out the window. Turning it over to a for-profit entity is a betrayal of that trust.

State officials have upheld a decision denying a liquor license to a politically connected developer who won a contract to bring a restaurant, bar and banquet hall to lakefront state park property lining Indiana’s towering dunes. The state Alcohol and Tobacco Commission voted 4-0 Tuesday, siding with a local board that denied a license to Chuck Williams in September. Williams says the decision imperils the whole multi-million dollar project to rehabilitate and build out the park’s dilapidated pavilion, which is nestled among the dunes molded over thousands of years at the southern tip of Lake Michigan. … Williams, a high-ranking state Republican Party official who has donated handsomely to GOP causes, has denied his political connections played a role, and the Indiana DNR says it followed state and federal laws and did not give Williams preferential treatment. However, legal experts have said the deal raises red flags and amounts to a long-term give-away of cherished public parkland. They questioned why the state didn’t seek additional bids on the project. The only competing offer came from a nonprofit group of local conservationists, lawyers and finance professionals.

Yet five years after a politically connected developer suggested officials should hire a company to rehabilitate a dilapidated beachfront pavilion at the popular tourist destination, a small construction project has ballooned into a decades-long privatization deal with the state. It includes two beachfront restaurants, a rooftop bar, a glass-walled banquet hall promising “the best view in Indiana” — and there is potential for more development to come. What’s more, the company ultimately picked to do the job was co-founded by Chuck Williams, the developer who pitched the initial idea. Williams, a regional chairman of the state Republican Party, worked behind the scenes for over a year with the administrations of two GOP governors, shaping and expanding the plans. He faced competition from just one other company — a bid that was deemed “good” though not as profitable. … Still, opponents say the favorable terms of the contract, as well as the apparent advantage Williams had over his competitors, are indicative of murky proceedings that can surround privatization deals. Aside from Williams’ involvement, some question whether the state should have involved any private company to shape the long-term vision for Indiana Dunes State Park, a publicly owned property that draws more than a million yearly visitors.

As an inmate worker inside Marion County Jail II, James Hales was trusted and could move virtually anywhere throughout the four-story privately run jail near downtown. What he saw during his on-again, off-again incarceration over the course of six months at the end of 2015 and the start of 2016 sickened, frightened and discouraged the man locked up for driving on a lifetime suspended license. … That someone is Marion County Sheriff John Layton, under whose authority Jail II operates, after he said he became aware a week ago of suspected heroin overdoses in the facility and authorized a raid by 60 sheriff’s deputies that led to the discovery of cash, drugs and cell phones and resulted in the fatal overdose of one offender who panicked and swallowed a balloon containing heroin as searchers moved in. … Hales claimed an officer on temporary assignment from one of Corrections Corporation of America’s other jails, transferred to help CCA fill out the perpetually understaffed Marion County facility, wanted him to traffic contraband inside Jail II. …

Marion County Sheriff John Layton said he became aware last week of an exploding drug problem inside of Jail II under the control of Corrections Corporation of America, a private jail operator. That’s why he assigned 40 sheriff’s deputies to conduct a five-hour long shakedown of the privately run facility at 730 East Washington Street Friday night. Deputies have been back twice more this weekend after drugs and at least one cell phone were discovered, though Layton could not confirm reports that weapons were also found. One offender died of a suspected drug overdose after apparently swallowing a balloon full of heroin during the search. … Layton could not speculate whether offenders, outsiders or CCA employees were responsible for the smuggling of drugs and rumored weapons into the facility. … The sheriff said he would meet with his staff, CCA administrators and IMPD investigators Monday morning to examine security needs at the facility in advance of a press briefing later this week. One military veteran said he felt safer in Iraq than inside Jail II and resigned his job there as a corrections officer after just two months this past summer. … Frost said he quit CCA because he was often outnumbered, alone and intimidated while working in the open dorm environment. … Marion County contracts with CCA at a cost of nearly $10 million a year to operate Jail II in a ten year deal that is set to expire at the end of 2017. Mayor Joe Hogsett is on track to announce by the end of this year his plans for construction of a new jail and sheriff’s office and reforms of the criminal justice system which may not include outsourcing to a private operator such as CCA. …

Purdue University is mulling multiple solutions to feed an influx of hungry students, but outsourcing dining operations is no longer one of them. … Concerns arose in the community last spring after the university hired an outside consultant to study its dining services and recommend necessary changes to prepare for an increased on-campus student population. Outsourcing was one option being considered because it would offer financial incentives, Vice Provost for Student Life Beth McCuskey previously told the Journal & Courier. … Sullivan said the purpose of the dining study was to determine how the university can accommodate and feed the extra students living on campus with the new 800-bed Honors College and Residences, while also shortening lines in the dining halls. The study also took into consideration Purdue’s plans to produce an additional 1,900 more beds in the next few years as part of its goal to increase housing options so at least half of its students can live on campus. … The study, conducted by Envision Strategies, found that Purdue runs an effective dining setup, so the university made the decision to now focus on where and what types of food services need to be added, Sullivan said. … The study still is being analyzed, he said, and a master plan will hopefully be done by the end of the year. …

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